<p>Eagle, your question is an interesting one. I found those articles really interesting and will go back and read more closely when I have time. I do believe one pointed out (or I could be confusing with another article) that it took colleges a long time to change their reputations. So will the stodgy employers who only hire from top schools consider WUSL a top school anytime soon even if US News does? Chances are none of them went there. I worked for a firm mentioned right out of college. I that that firm still hires from the same school they did in my day, 20 years ago!</p>
<p>I think the krueger study misses many of the realities of the present economy. Their studies were likely correct when they did them, but our economy has changed dramatically in just a few years as every outsourced person can tell you (who even heard of outsourcing 5 years ago?) and the newer theories ring true.</p>
<p>Jamimom, about FinAid offers relative to the desirability of the student, I suspect you're right but I can't prove it. It would involve breaking too many taboos to compare admissions profiles, EFC's, and aid offers, which is what you need to do to <em>really</em> put together an adequate picture of what's going on.</p>
<p>Eagle, as I mentioned earlier, Dickinson College is supposedly one of the "big offenders" according to one of their own admissions people. Yet their need-based grants outspend their merit grants by a factor of 15-1.</p>
<p>I consider "so called merit aid" as awards given to kids who are not in the top quartile and are desirable for the reason that their famiies can pay the full tuition. Some of those kids might even be near the bottom of the hierarchy at such schools. It is an economic ploy to get the seats filled at slightly less than list price. It is entirely possible that a high need kid would get rejected since economically it does not make sense to take him to struggle financially each year when the same dollar amount can buy 5-6 kids who can afford it.</p>
<p>There are schools that have to practice some of this to have a better chance to stay solvent, but I hope that this does not become economic practice as well because you can see where this leads. I do not have implicit trust in the colleges admissions policies and even less so for financial aid. I worked for a school that was very above board in its need aware/not 100% of need given policies, but from what I understand, not all schools are that honest. Also even there, some of the practices seem to skirt on being unfair to me.</p>
<p>I understand your point about the studies. You are right that things have changed dramatically recently but I think it may actually be accelerating the point Krueger and Dale make. Let me explain:</p>
<ul>
<li><p>Though there is more competition to get in to the highest rated schools, those schools are producing a smaller percentage of advanced scholarships, i.e. Rhodes, Fulbright, etc.</p></li>
<li><p>The number of CEOs from Ivy league schools is going down, though it is still a high percentage.</p></li>
<li><p>It may be industry specific. You do not see as many Ivy league types in the engineering disciplines as you may as a lawyer. I think that the dramatic change in the economy is driven by the engineers more than the social scientists. Note, the use of the internet today was the engineers playground of yesterday.</p></li>
</ul>
<p>None of this is to take away from schools like Harvard or Brown, etc. It is just that there are a number of institutions that are competing with them quite effectively. This is good because it will improve the state of education overall . . . at least that is my hope. ;-)</p>
<p>
[quote]
Yet their need-based grants outspend their merit grants by a factor of 15-1.
[/quote]
</p>
<p>Even that measure is cloudy. Say, for example, an applicant is selected as an Emory Scholar, a merit-aid discounting program.</p>
<p>If subsequent examination of the parent's financial filings indicates some "need", that portion of the Emory Scholars package is shifted to the "need-based" aid category. There is nothing wrong with that, except that it clouds the statistical picture.</p>
<p>It doesn't matter on a "micro" level. Parents and their kids compare the actual net cost of attending the various schools and make a decision -- doesn't really matter what the dollars are called. However, it makes it difficult to get a handle on the "macro" level of college financing.</p>
<p>The biggest risk to low-income people is the enormous competitive pressure for formerly need-based aid schools to enter the merit-aid discounting fray simply to maintain their historic applicant pool "quality". On a macro level, the merit-aid arms race cannot help but divert funds away from need-based aid. The downside is not at a single school, but to the system as a whole.</p>
<p>eagle79, I have performed the "same" test using the the same calculators and others and varied by as much as $10,000 (one kid) so I know what you are talking about. When we are dealing with the full-need, 100% of need met schools, we will look first to what percentage workstudy and loans are in a typical package. I am in the cult that believes grants are the only "financial aid", the rest is payment for work done or loans that have to be paid back. </p>
<p>After researching as much as we can amongst her "fit" schools, we will just apply and hope that the financial winds carry our reports to the desk of a generous reviewer as there appears to be no rhyme or reason to any of this that I can determine. Maybe if someone rents, and has only w-2 income the EFC calculations are repeatable but for those of us with schedules from A to Zinc, we're just at their mercy.</p>
<p>P.S. Of course, we have our financial safeties in our pocket, and some merit chances also. In this post I'm only talking about need only schools.</p>
<p>You make many good points, but some of the underlying reasons are important to note. Fewer CEOs from ivies? Of course, because the are fewer rich, connected people at them. Fewer Rhodes scholars, yes, things like merit money and the relative increase in college costs have taken the brightest to a wider variety of places, but the number is a drop in the bucket.</p>
<p>But in top jobs where meritocracy is more important, and that's where we have big numbers, I don't think Kreuger makes sense. My field is management consulting, and I can tell you school counts. As it does in corporate hiring and in many service industries such as law, banking, accounting etc.</p>
<p>As for engineers, I think the reason we see few top engineers who are ivy grads is simply because those are not the top engineering schools. But within engineering pecking order, school counts (MIT Caltech...).</p>
<p>
[quote]
I consider "so called merit aid" as awards given to kids who are not in the top quartile and are desirable for the reason that their famiies can pay the full tuition. Some of those kids might even be near the bottom of the hierarchy at such schools. It is an economic ploy to get the seats filled at slightly less than list price.
[/quote]
jamimom, to a certain extent we've been talking past each other, given your definition. In my mind, a merit award is one offered as an inducement to a student who could literally go almost anywhere based on his/her CV. An "impact" student whose presence will make a difference. Those are big awards, offered to top decile or so students, because their presence will have a favorable effect on the college community. Outside of that criteria, we probably agree.</p>
<p>This game has long been played with recruited athletes. The coach signs up his choices, pledging them full-rides. Then, where it appears feasible, a portion of the "scholarships" are shifted to the Universities "need-based" account, so that the coach can take the money thus "saved" for the athletic department and spend it on additional jocks.</p>
<p>Whether "needy" or not, these recruited jocks wouldn't be on campus at all if they had to depend on their SAT scores to gain admittance.</p>
<p>As Byerly points out, coaches, actually athletic administrators, often play with funding sources. At some schools this is done in an attempt to bring the college in compliance with the Title IX requirements relating to the nondiscriminatory distribution of athletic financial assistance (AFA). Athletic department funds are provided to females, and need-based, or other non-college based aid, is provided to males. The latter type of aid doesn't count as AFA and is not considered in Title IX calculations. Unfortunately many schools don't actually do the math to get the ratios right and wind up providing insufficient AFA to males, which is as big a violation of Title IX as underfunding females.</p>
<p>"But in top jobs where meritocracy is more important, and that's where we have big numbers, I don't think Kreuger makes sense. "</p>
<p>Is it really merit or the old school tie thing?? Given the dubious value of most mgt. consulting output I wonder what the best and brightest are really contributing.</p>
<p>A companion piece to the excellent Fay Vincent article in the Washington Post is this article by Williams Econ Prof., Gordon Winston, in the Williams Alumni magazine:</p>
<p>This article is terrific in laying out the underlying economic model of both hidden and visible discount incentives. It will be an eye-opener for this discussion.</p>
<p>BTW, one paragraph of the Vincent piece in the Post provides the nexus between these two articles. It describes what is beginning to happen as the "800-pound gorilla" (or "large bear") schools start to feel the sting of merit-aid poaching:</p>
<p>
[quote]
That raises another reason for colleges to eschew merit aid: self-interest. Right now, the very best schools offer only need-based financial assistance. But if they feel threatened, these well-endowed schools are in the best position to play the admissions game where the determining factor is cash. Rob Oden, when he was president of Kenyon College in Ohio, made this point. "Look, this is a little like poking the bear with a sharp stick," he told me. "The strong schools who only give aid based on need are the bear. When they begin to notice what we are doing because they are losing good students, they will respond and the game will end." (Oden is now president of Carleton College, a top-ranked school in Minnesota, which, like Williams, does not grant merit aid.)
<p>
[quote]
Whether "needy" or not, these recruited jocks wouldn't be on campus at all if they had to depend on their SAT scores to gain admittance.
[/quote]
</p>
<p>True enough but that can be said for many students. Student X would not be on campus if she wasn't a lead violinist, artist, athlete, etc. Often it is what the student can bring to the school, sometimes it is SAT scores, sometimes something else.</p>
<p>BTW, as a practical, nut 'n bolts take on this issue:</p>
<p>When I started pouring over the median SAT scores at various schools for my daughter, I was most surprised by the number of schools that had apparently become "much stronger academically" over the last 30 years. Not to name names, but I found example after example of decidedly mid-tier schools in the South and Northeast that now touted very high SAT medians. Had their "typical student" really improved that much?</p>
<p>The answer to this question lies in the heavy use of the merit-aid discounting game. The answer is no. The typical student at these schools is probably about the same, relatively-speaking, as it has always been. That is confirmed, I think, by the class rank of kids getting into these schools relative to the class rank getting into the top-tier schools. But, the statistics change remarkably when a school buys SAT scores for the top quintile of the student body. I think it's important to understand the impact of merit-aid discounting when scratching your head over the median SATs and whether or not our kids have a chance of getting in anywhere. In many cases, the SAT numbers printed in USNEWs are not reflective of what a school can actually get in the open market and may not be reflective of the typical student a non "Honors College" kid will encounter.</p>
<p>Thanks for posting the article. At the end it raises a number of interesting questions:</p>
<p>
[quote]
Why dont schools expand to meet excess demand? Why do they often engage in aggressive price discounting even when they can fill their classrooms and dorms? Why do the most expensive colleges have the longest queues of students trying to get in?
[/quote]
I would add a number of others:</p>
<ul>
<li><p>What will be the impact of online education in expanding the opportunities to learn at a particular school?</p></li>
<li><p>Why are college costs going up much faster than inflation? [it would seem to me that the application of technology to the problem should be driving the cost down]</p></li>
<li><p>Why is there differential pricing between college classes offered to HS students and to those offered to college students?</p></li>
<li><p>Why are the schools moving away from awarding credit for AP classes? Or at least making it more difficult?</p></li>
</ul>
<p>Elite schools don't expand to meet demand because each additional student either costs them money or reduces the quality of the product.</p>
<p>If it costs $75,000 per student and you only receive a net $30,000 in tuition and fees, you come out $45,000 in the hole with each additional student, if you maintain the same quality (student/faculty ratios, etc.). If you grow enrollment without a corresponding increase in faculty and services, then your real "quality" declines. Plus, you get the double-whammy of reduced median stats.</p>
<p>For private colleges, growth is limited by the growth in endowment, because that's where the funding for additional students must be found if quality is to be maintained at current levels. At public schools, growth is limited by the appropriations of the legislature. One of the reasons there is such an admissions crunch right now in the UC system is that the state of California has basically imposed a negative-growth budget on the university system. Similar budget constraints around the country are imposing a reduction in quality on quite a few state systems.</p>
<p>To answer an earlier point about college and employment-- I work in Human Resources and I think most discussions about elite level hiring (i.e. I-banking, Management consulting, top tier law firms, etc.) misses the point-- the issue isn't the "old school tie" thing-- for the most part, these firms want hugely motivated, hard-working, smart kids who can add diversity(in greater or lesser degrees depending on the firm), and hiring Thruston Howell III whose daddy played squash with a senior partner doesn't get that for you. We would rather hire the top kid from U. Iowa than hire the kid bringing up the rear at Harvard, no question. We also love kids who have worked their way through school. </p>
<p>However, hiring costs money. Send a team of partners or Managing Directors off to east-overshoe university, and your yield rate is ??? Send a team off to Williams or Yale and you know what you're going to get and how many you will get-- you've been there before, you know the caliber of the average walk-in candidate, you've got relationships with professors who help steer you to the kind of student who can be successful making the transition from student to worker bee. </p>
<p>So-- companies recruit where they've already recruited and been successful at it. Schools who do a poor job marketing employment opportunities to top tier students don't see as much "action" as the schools who do a more professional job in career development. Small schools like Williams get more than their fair share of interest by corporate employers because an Art History major from Williams can write and think-- usually really well-- which is important for a lot of corporate roles. Many employers would rather hire an Art History major from Williams for a marketing role vs. a kid from No-name U. with a degree in "business" or marketing simply because they've got the numbers which show that it's cheaper, or they have higher retention, or the employees are more successful over time. If I had a dollar for every cover letter I've ever gotten from a recent college grad that was filled with poorly written, non-grammatical run-on sentences... extolling the value of their "communications degree". Well-- you can't communicate, so what exactly did you learn in college???</p>
<p>I think employers are very sensitive to changes in the student body at colleges; not so sensitive to changes in the rankings if they're based on things like amenities, % of alumni who give, etc. We develop our recruiting plan well in advance of the academic year and we watch the SAT scores closely when we do... so we are aware of emerging talent, schools with improving student bodies, etc. We monitor diversity enrollement very closely. We watch NMF enrollment-- it helps us do a better job of recruiting at top State U's, for example. We watch the stats at the various honor colleges-- some are just window dressing (i.e. special dorms, priority enrollment for desireable classes) which doesn't translate to what we need, whereas some really attract a high quality student who would be competitive with any elite school grad.</p>